New Jersey Announces a New School Funding Formula: But What About Abbott?

After a solid year of working out the intricacies sowed by the mix of money, schools and politics, New Jersey governor Jon S. Corzine announced a long-awaited new school funding plan. A New Formula for Success: All Children, All Communities was approved on an expedited basis by the New Jersey Legislature on January 7, 2008. Under the new formula, the state will allocate approximately $7.8 billion to K-12 education for fiscal year 2009, a seven percent and $532 million increase to this year’s education budget. Furthermore, all districts will see a boost in school funding ranging from 2 to 20 percent during the first two years of its implementation.

Yet, despite these increases, the formula has spurred a cautious reaction throughout the state, especially in the low-income Abbott districts. The New York Times reports that “the proposed increases represent the largest gain in state aid in more than a decade for some affluent suburban districts, but they were a sharp disappointment for many historically poor urban districts that have received more support in the past.” Educators across the board agree that they do not yet have enough information to fully judge the new plan.

School Funding Background and Implications of the New Formula

New Jersey implemented a two-tiered funding system following the Abbott v. Burke decision in 1991, which guaranteed the state’s poorest 31 urban districts funding equal to its wealthiest ones. After this decision, the 31 Abbott districts were allocated money through a unique calculation to account for the fact that it was easier for wealthier districts to raise money through property taxes. According to David Sciarra, attorney representing the Abbott districts and executive director of the Education Law Center, the base funding proposed in the new formula would mean that Abbott districts would get funding amounts closer to the state average and not to the levels of the wealthiest districts, as mandated by the Supreme Court.

Frustrated by what he calls a “court-driven, ad-hoc system” of distributing state aid, Governor Corzine argues that New Jersey’s current funding method “leaves too many children out of luck simply because they live in the wrong ZIP code.” Through what Corzine labels a “unified and Constitutionally appropriate approach to school funding,” the new formula will allocate similar resources to similarly situated students, regardless of where they live. According to Education Commissioner Lucille E. Davy, the new formula “follows the basic principle that children with greater needs deserve greater resources” and it will better address the needs of the 49 percent of low-income students that live outside the Abbott districts, and have not been covered by the Abbott litigation.

Davy insists that "there is absolutely no intention to undermine the progress we have made in Abbott districts," but Abbott advocates disagree. Sciarra, fears state aid increases will not keep up with rising inflationary costs under the new formula. “These districts are going to have to start making significant cuts," Sciarra reports. Though Abbott districts will still receive more than half of all state aid under the new plan, 22 of these districts will receive the minimum 2 percent increase. Advocates testified at legislative hearings that this move will choke the ongoing reforms that have begun to show progress in those communities. Camden School Board President, Sara Davis, said the proposed formula will be "devastating" to her district, which relies on state and federal funding. “We don't have any other way to make up for that funding," Davis said. Sciarra agrees that the plan will “dismantle the unprecedented success” that Abbott districts have achieved in improving student performance.

The Devil is in the Details

School officials throughout the state are worried about the details of the plan. One superintendent said he was "elated" at the prospect of a 20 percent funding boost from the state, but he also wanted more information. Likewise, a lobbyist for the New Jersey Association of School Administrators shared his concerns at a hearing before the Senate budget and education committees by saying his petition had changed from “show me the money” to “show me the formula.”

Davy describes the new funding plan as a “fair, balanced, equitable and logical system of allocating state education aid.” Under the plan, aid will be distributed through a foundation formula based on a costing-out study that determines the amount of money each district needs to spend to allow every student to attain New Jersey’s educational standards. The base amount varies with grade level, and additional weights will be used to account for at-risk, special education, and limited English proficiency students. The formula also includes an additional weighting for students in areas of high poverty concentration.

The biggest winners in the plan appear to be middle-class districts with growing enrollment, especially those that have seen increases in poor and limited English proficiency students. The funding formula holds all districts in the state “harmless” for the first three years, meaning that no districts will lose aid during this period. After three years, the formula specifies that aid can decrease for districts in which student enrollment drops. Funding for special education under the new plan, is allocated based on average statewide special education costs, based on the “census method.” Some districts that have developed strong special education programs worry that they will be shortchanged, under the wealth-equalized method, if they have more than average enrollment.

In addition, the formula will impose aid caps to “ensure efficient and effective decisions regarding the increase in aid.” For districts spending below adequacy levels, increases will be capped at twenty percent; for those spending above adequacy levels, increases will be capped at ten percent. Moreover, districts spending over their adequacy budgets will be required to use a portion of their aid increase for property tax relief.

Sciarra insists that the governor’s plan to change the Abbott system requires court approval and that it will be “vigorously oppose[d]” by his group. Corzine has indicated that he “foresees phasing out the Abbott districts,” but he agrees that the move “will require Supreme Court approval.”

Prepared by Marcela Briceno, December 17, 2007